In this article, we will discuss 12 Best Fast Food Stocks to Buy Now.
Fast food stocks are businesses that run quick-service restaurants. These stocks can be a smart option to invest in the restaurant industry, which tends to perform well even during economic downturns due to its low costs and convenience. For example, the early COVID-19 pandemic was not favorable for the restaurant business overall, but fast-food chains that were able to offer curbside pickup, delivery, and drive-thru services performed better than their competitors that relied on dine-in. A challenging economic situation presents fewer risks because many fast-food restaurants prioritize providing great value.
As per a research report, the global fast food market has expanded gradually in recent years. It will grow at a compound annual growth rate (CAGR) of 2.9%, from $645.2 billion in 2024 to $663.92 billion in 2025. Changes in customer choices and lifestyles, rapid urbanization, globalization, greater demand for convenience meals, and an increase in the working population have all contributed to historic expansion. The fast-food market’s largest region in 2024 was North America. Asia-Pacific is anticipated to be the fastest-growing region over the projection period.
Automation is changing the fast-food service business in the United States. Robotic systems and artificial intelligence tools are now reducing production times and increasing efficiency. Complex beverage preparation time has been reduced from 87 to just 36 seconds due to a new drink-making system. In the meantime, a dual-sided grill has sped up cooking by 70% in high-volume locations, and an avocado-processing robot reduces prep time by 50%. According to a National Restaurant Association research released in February 2023, 58% of restaurant operators anticipated that 2023 would see a rise in the usage of technology and automation to cope with labor shortages. In a May 2023 poll, HungerRush found that 36 percent of 1,000 Americans stated they believed that large restaurant chains lacked enough employees to process orders, make food, and deliver food.
Chief information officer Aaron Nilsson of Jet’s Pizza, a franchise with locations in Michigan, introduced a phone bot driven by artificial intelligence to take orders for pizza. He stated:
“Now most consumers expect their local pizza place and their favorite coffee house to remember their last order, know what credit card they want to use, and make it quick and easy for them to complete an order. Society has moved on and automation is expected – even from the small-time operator.”
According to a 2024 LendingTree survey, 78% of Americans now consider fast food a luxury, with prices rising by more than 60% since 2014. Quick-service restaurants (QSRs) have been compelled by this change to reconsider what value is. Companies are prioritizing quality, convenience, and technology over price competition to defend higher prices. According to Savneet Singh, CEO of a significant restaurant technology business, the value today isn’t just about price; it’s about the entire experience. Moreover, technology is being used by businesses to improve this perceived value. AI-powered kiosks, drive-thru technology, and mobile ordering shorten wait times and customize service, while kitchen automation increases reliability. These days, loyalty programs use data analytics to provide hyper-personalized rewards, which boosts consumer engagement and encourages repeat visits.
However, affordability is still crucial. The expense of fast food has caused 62% of consumers to cut back on their purchases, which has led several businesses to bring back $5 meal offers, as per the LendingTree study. A combination of price, quality, convenience, and personalization is the new QSR value equation. QSRs have the potential to redefine luxury as intelligent, easily accessible service by utilizing technology and loyalty.
With that said, here are the 12 Best Fast Food Stocks to Buy Now.
A close-up of a hamburger, french fries, and a soft drink, representing the fast food chain.
Our Methodology
For this article, we sifted through the online rankings to form an initial list of the 20 Fast Food Stocks. From the resultant dataset, we chose 12 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 1,009 hedge funds in Q4 2024 to gauge hedge fund sentiment for stocks. We have used the stock’s revenue growth year-over-year as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
12. Yum China Holdings, Inc. (NYSE:YUMC)
Number of Hedge Fund Holders: 29
Yum China Holdings, Inc. (NYSE:YUMC) is China’s biggest restaurant operator, with over 16,000 locations and system-wide sales of about $12 billion in 2024. It generates revenue from franchise fees and its own eateries. The firm, which separated from Yum Brands in October 2016, pays 3% of systemwide sales as a trademark licensee. It owns, operates, and franchises restaurants in China under the brand names KFC, Pizza Hut, and Taco Bell. It is among the Best Food Stocks.
The company gave $1.5 billion to shareholders in 2024, which included $1.24 billion in share buybacks and $248 million in dividends, lowering the number of outstanding shares by more than 31 million. The business concluded 2024 with $2.8 billion in net cash and $714 million in free cash flow. Given its excellent financial position, Yum China Holdings, Inc. (NYSE:YUMC) is boosting its quarterly dividend by 50% to $0.24 per share, pushing its payment ratio beyond 40% of expected 2024 diluted earnings per share.
Chen Luo, a BofA analyst, maintained his Buy recommendation on Yum China Holdings, Inc. (NYSE:YUMC)’s shares and increased his price objective from $57.50 to $60.50. The company adjusted its forecasts for same-store sales growth and margin, which resulted in only minor adjustments to EPS projections. Additionally, the company raised its target multiples in its blended valuation, which fueled its higher price objective. In a preview, the analyst informs investors that the company anticipates a “solid” first quarter.
11. Papa John’s International, Inc. (NASDAQ:PZZA)
Number of Hedge Fund Holders: 30
Papa John’s International, Inc. (NASDAQ:PZZA) is one of the leading participants in the global QSR, or quick-service restaurant, pizza business, with over 6,000 locations in nearly 50 countries by the end of 2024. The company runs a franchised system, owning 9% of its restaurants and generating revenue through franchise royalties, pizza and related product sales at company-owned locations, and sales from its commissary supply chain. It is ranked 11th on our list of the Best Food Stocks.
Papa John’s International, Inc. (NASDAQ:PZZA)’s stock price increased by 18% after the firm was recently targeted for a possible $1.4 billion takeover by Irth Capital Management for $43 per share. However, the abrupt resignation of director Anthony Sanfilippo cast doubt on the deal’s legitimacy and caused uncertainty.
Nevertheless, a bullish thesis of the firm is supported by several facts. Todd Penegor, the CEO who was hired in August 2024, has an excellent history at Wendy’s, which suggests a possible turnaround. While 2025 EPS is predicted to drop 21%, a 34% recovery is anticipated in 2026, and same-store sales are anticipated to rise in late 2025.
Growth may be fueled by operational upgrades, including improving franchisee ROI, improving the pizza-making process, and updating the app. A franchised business model allows free cash flow to be used for share buybacks, which increases shareholder returns even further. If management performs well, Papa John’s International, Inc. (NASDAQ:PZZA) has a lot of long-term potential.
10. Restaurant Brands International Inc. (NYSE:QSR)
Number of Hedge Fund Holders: 31
Restaurant Brands International Inc. (NYSE:QSR) is one of the world’s largest restaurant companies, with systemwide revenues of roughly $44 billion in 2024 across a network that includes over 32,000 outlets in over 100 countries. The company’s main sources of income include Tim Hortons’ supply chain activities, royalties, and leasing income from franchised locations, and retail sales at its company-owned restaurants. As of year-end 2024, the firm’s portfolio, which was established in 2014 following 3G Capital’s acquisition of Tim Hortons International, is divided among Burger King (7,082 units), Tim Hortons (4,539 units), Popeyes Louisiana Kitchen (3,520 units), Firehouse Subs (1,345 units), and international franchise units of those banners (15,639).
Restaurant Brands International Inc. (NYSE:QSR) appears to be taking necessary steps to address evolving customer demands, investing in store reimaging, loyalty programs, and digital ordering to strengthen its brands’ competitive positioning while leveraging its scale-driven cost advantage. As per Morningstar analysts, over the next few years, the company’s consolidated earnings should only become more significant due to the international business, which continues to be the focal point in its portfolio.
In fiscal Q4 2024, Restaurant Brands International Inc. (NYSE:QSR) performed well, exceeding analyst predictions with adjusted diluted EPS of $0.81 as opposed to $0.784, which is an 8% year-over-year increase. Furthermore, total revenues also rose by 26.2% from the previous year to $2.296 billion, which makes it one of the Best Food Stocks.
9. The Wendy’s Company (NASDAQ:WEN)
Number of Hedge Fund Holders: 33
Revenue growth (YOY): 2.98%
The Wendy’s Company (NASDAQ:WEN) boasts a value offer centered around fresh and craveable products at competitive pricing points, making it the second-largest quick-service restaurant burger company in the United States, after McDonald’s. Following the 2006 and 2011 divestitures of Tim Hortons and Arby’s, the company now only operates the burger brand, generating sales from more than 7,200 locations in 30 countries as of the end of 2024. It is among the Best Food Stocks.
Over the past few years, The Wendy’s Company (NASDAQ:WEN) has had an upsurge because of its breakfast platform’s renewed launch, store redesign, and great value positioning. Since 2019, mid-single-digit annual US revenue growth has been supported by steady same-store sales growth and solid cash-on-cash returns. The company is focusing on its breakfast business, unit development, and international expansion to fuel its next phase of growth. Morningstar analysts still believe that the company’s efforts to expand internationally are unlikely to produce tangible results, but they also point out that significant development agreements in Asia-Pacific suggest that The Wendy’s Company (NASDAQ:WEN)’s brand might be strong enough to make a modest entry into developing foreign markets. Analysts continue to believe that success is unlikely in regions where Burger King and McDonald’s already hold a dominant market share.
In fiscal Q4 2024, The Wendy’s Company (NASDAQ:WEN) announced a new target dividend payout ratio of 50% to 60% of adjusted profits as part of an overhaul to its capital allocation policy. The company can increase growth and long-term shareholder value due to its new capital allocation policy. The business’s operations are resilient. The company’s global same-restaurant sales grew for the fourteenth consecutive year in fiscal year 2024. Systemwide sales for the business jumped 5.4% to $3.7 billion in fiscal Q4 2024. Adjusted revenues for the quarter were $459.3 million, a 6.4% rise from total revenues of $574.3 million. Additionally, its adjusted EBITDA surged by 8.6% to $137.5 million.
8. Yum! Brands, Inc. (NYSE:YUM)
Number of Hedge Fund Holders: 33
Revenue growth (YOY): 6.69%
Yum! Brands, Inc. (NYSE:YUM) is a US-based restaurant operator with four brands in its portfolio: Habit Burger & Grill (almost 400 units), Pizza Hut (20,225 units), Taco Bell (8,757 units), and KFC (31,981 global units at year-end 2024). It is the second-largest restaurant company in the world, behind McDonald’s ($131 billion), ahead of Restaurant Brands International ($44 billion) and Starbucks ($30 billion), with more than $65 billion in 2024 systemwide sales. It is ranked eighth on our list of the Best Food Stocks.
The ability of the biggest operators, like Yum! Brands, Inc. (NYSE:YUM), to expedite crucial investments in e-commerce platforms, delivery integration, and technological solutions that satisfy the changing needs of the contemporary restaurant customer, despite the fact that the restaurant industry has undergone significant change in recent years, gives investors confidence. More than 50% of globally systemwide sales now come from digital channels, which analysts anticipate will continue to be a key component of its strategic playbook. Recent acquisitions show how much importance the company has placed on digital upgrades. Franchise unit economics are strengthened, and its appealing unit development flywheel is propelled by the company’s efficient and cost-effective delivery of its digital tools to franchisees.
Citi maintained a Neutral rating on Yum! Brands, Inc. (NYSE:YUM) also raised the price target from $148 to $151. In a research note, the analyst informs investors that the shares have outperformed year-to-date and that this trend should continue through Q1 earnings, barring any significant negative developments in global comp growth or store openings.
7. Sweetgreen, Inc. (NYSE:SG)
Number of Hedge Fund Holders: 33
Revenue growth (YOY): 15.89%
Sweetgreen, Inc. (NYSE:SG) is a mission-driven, next-generation restaurant and lifestyle business that delivers nutritious meals on a large scale. Its ambitious goal is to become as widely available as traditional fast food, but with the transparency and quality that consumers nowadays expect. It is using fresh produce and ingredients to create plant-forward, seasonal, and environmentally responsible meals with an emphasis on local, organic, and regenerative sourcing. Customers’ ordering process will be made easier, and the robotic “infinite kitchen” model’s cleanliness will only help the business grow.
In Q4 2024, Sweetgreen, Inc. (NYSE:SG) reported $160.9 million in revenue, up 5.1% from the previous year, due to its innovative menu, technological advancements, and overall visitor experience, making it one of the Best Food Stocks. This result was in line with analysts’ projections, but it was a softer quarter for the company, with EBITDA estimates missing by a significant margin.
In 2024, Sweetgreen, Inc. (NYSE:SG) produced impressive financial results, as its restaurant-level profitability increased by more than 200 basis points to 19.6% and its revenues grew by more than 16% to $676.8 million. The company’s adjusted EBITDA improved by $21.5 million over the previous year to $18.7 million for its first full year of positive results. By adding 25 new restaurants throughout 2024, it expanded its presence and ended the year with 246 outlets, including 12 Infinite Kitchens. The 2024 class of new eateries performed admirably, tracking to hit $2.8 million in one-year sales.
6. Wingstop Inc. (NASDAQ:WING)
Number of Hedge Fund Holders: 36
Wingstop Inc. (NASDAQ:WING) is a rapidly expanding restaurant chain with over 2,550 locations that operates on a franchise basis with a $10,000 initial deposit per outlet. One of its main points of differentiation is its dedication to using fresh food preparation methods, eliminating heat lamps, and making sure that everything is prepared on-site, including sandwiches and hand-diced carrots. The business intends to open 4,000 outlets abroad and 6,000 in the United States as part of its ambitious expansion plans.
In terms of financial efficiency, Wingstop Inc. (NASDAQ:WING) outperforms several of its competitors on the basis of return on capital. Often viewed as a rival to McDonald’s, competitors such as Shake Shack are far less effective.
The company’s fiscal 2024 financials set a new record, marking the 21st straight year that same-store sales had grown and making it one of the Best Food Stocks. Domestic same-store sales rose 19.9%, primarily due to transaction growth, while system-wide sales rose 36.8% to $4.8 billion. Additionally, it reported an adjusted EBITDA of $212 million, a 44.8% rise. Wingstop Inc. (NASDAQ:WING) showed strong franchisee demand by adding a record 349 restaurant sites to its portfolio in 2024, achieving its goal of exceeding 10,000 units.
As it maintained its excellent momentum, the firm recorded a 10.1% increase in same-store sales for Q4 and a 70% increase in digital sales. My Wingstop, the company’s in-house IT stack, played a significant role in boosting interaction and expanding its digital database to more than 50 million clients. Furthermore, Wingstop Inc. (NASDAQ:WING) saw an increase in brand awareness and reach among younger consumers as a result of its strategic alliances with the NFL, NBA, and WWE.
5. Shake Shack Inc. (NYSE:SHAK)
Number of Hedge Fund Holders: 43
Shake Shack Inc. (NYSE:SHAK) operates a roadside burger business. It offers a standard American menu that includes quality burgers, hot dogs, crispy chicken, frozen custard, crinkle-cut fries, shakes, beer, and wine. The company uses a whole-muscle combination of all-natural Angus beef that is devoid of hormones and antibiotics. The beef is ground fresh every day, cooked to order, and served on a potato bun that has not been genetically modified. Its menu consists of a variety of traditional American foods and drinks. It is ranked fifth on our list of the Best Food Stocks.
In its most recent fourth-quarter earnings report, Shake Shack Inc. (NYSE:SHAK) posted adjusted earnings per share (EPS) of $0.26, $0.10 more than analysts had predicted. The company’s quarterly revenue of $328.7 million was marginally higher than the $325.3 million average expectation. The revenue jumped by about 15% YoY. Sales at company-owned and franchised outlets combined came to $500.7 million, which was roughly $1.5 million less than anticipated. The stock of the firm jumped more than 9% on February 20 after the earnings announcement.
Truist maintained its Buy recommendation on Shake Shack Inc. (NYSE:SHAK) shares and increased its price objective from $143 to $154. In a research note, the analyst informs investors of the company’s strong Q1 comps expectations, Q4 earnings beat, and higher FY25 adjusted EBITDA guidance. The company notes that its excellent positioning is shown by the company’s sustained same-store sales growth into Q1 despite weather and wildfire headwinds, a mismatched promotion, and an uncertain macroeconomic backdrop.
4. Domino’s Pizza, Inc. (NASDAQ:DPZ)
Number of Hedge Fund Holders: 46
Domino’s Pizza, Inc. (NASDAQ:DPZ) is a restaurant operator and franchise that, as of the end of 2024, had around 21,400 locations worldwide in more than 90 international markets. Revenue is generated by the company’s network of 25 domestic (and five Canadian) dough manufacturing and supply chain facilities, which centralize purchasing, preparation, and last-mile delivery for the company’s US and Canadian restaurants; royalties and marketing contributions from franchise-operated stores; and sales of pizza, wings, salads, sandwiches, and desserts at company-owned stores. The firm holds a dominant position in the global pizza business, with total sales of around $19.2 billion in 2024. The stock surged by more than 13% YTD, which makes it one of the Best Food Stocks.
Domino’s Pizza, Inc. (NASDAQ:DPZ) is ideally positioned to handle a challenging business climate due to its 85% digital sales mix, strong reward program, and rapidly expanding carryout business. Morningstar analysts see the company’s long-term focus on protecting franchisee profits, strengthening its expanding carryout business, fortifying its tech infrastructure, and increasing store density at the market level as prudent, even though they anticipate a difficult couple of quarters with signs of consumer trade-down and declining industrywide traffic.
BofA maintained its Buy rating on Domino’s Pizza, Inc. (NASDAQ:DPZ) shares and increased its price objective from $520 to $549. The company states it is “encouraged” that the results were largely in line with its internal plan, including for continued share gains in the QSR pizza category, even though Q1 2025 domestic same-store sales growth fell short of consensus expectations. It also claims it anticipates the gap with the industry to widen further as the firm launches its partnership with DoorDash in May and benefits from its recent launch of stuffed crust pizza.
3. CAVA Group, Inc. (NYSE:CAVA)
Number of Hedge Fund Holders: 47
CAVA Group, Inc. (NYSE:CAVA) is a brand of fast-casual restaurants in the United States that specializes in Mediterranean-style food. Its unit economics and solid growth in same-store sales are similar to those of Chipotle at a comparable size. According to ClearBridge Growth Strategy, the company is still in the early phases of realizing its potential for unit development. As brand awareness develops and new locations boost efficiency, there is potential for ongoing same-store sales growth. The stock grew by more than 29% in the past year, making it one of the Best Food Stocks.
CAVA Group, Inc. (NYSE:CAVA)’s strong momentum is shown by its excellent 28% YoY revenue growth to $225.1 million, with same-restaurant sales at 21.2%. Although it was still better than the previous year, the EPS of $0.05 was below the $0.07 expert consensus. The company is reaffirming its commitment to growing its fast-casual Mediterranean concept by launching 15 new restaurants in Q4 and planning 62-66 more sites in 2025.
Key growth drivers include menu changes, such as steak, which have successfully drawn more consumers, as well as an updated reward program aimed at encouraging repeat visits and interaction. In the face of wider economic constraints, CAVA Group, Inc. (NYSE:CAVA)’s inexpensive cost continues to be a significant advantage, drawing in budget-conscious customers.
2. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 67
McDonald’s Corporation (NYSE:MCD) is a multinational fast food business with almost 43,000 outlets worldwide. The Wall Street Journal has pointed out that the business, which is well-known throughout the world for its golden arches, is actively pursuing artificial intelligence. AI has potential in several areas for a fast-food giant like McDonald’s. Around 18 months ago, the company formed a collaboration with Alphabet’s Google Cloud, with a particular focus on AI. AI-powered ordering has already been tested by the company, and a new partnership might help it expand those efforts. AI has the potential to reduce labor costs while improving consumer satisfaction if it is successful in processing orders. It is ranked second on our list of the Best Food Stocks.
The E. Coli outbreak contributed to McDonald’s Corporation (NYSE:MCD) lower-than-expected quarterly earnings despite the company’s innovation drive, but there were other challenges as well. Revenue in Q4 2024 was $6.4 billion, which was around $88 million less than analyst projections and a slight 0.2% decline from the previous year. Performance at established locations is reflected in global same-store sales, which grew by 0.4%. US same-store sales, on the other hand, fell 1.4%, showing a slowdown in domestic growth and continued pressure to keep up momentum. Nonetheless, it is among the stocks that have performed well this year, rising more than 8% since the beginning of 2025, making it one of the Best Food Stocks.
At the end of FY24, McDonald’s Corporation (NYSE:MCD) had more than $1 billion in cash and cash equivalents, demonstrating a healthy cash reserve. The company’s dividends have increased for 48 years in a row.
1. Chipotle Mexican Grill, Inc. (NYSE:CMG)
Number of Hedge Fund Holders: 83
Chipotle Mexican Grill, Inc. (NYSE:CMG) is the largest fast-casual restaurant brand in the United States, with projected systemwide revenues of $11.3 billion by 2024. By the end of 2024, it had 3,726 stores spread over the United States, with a minor presence in Canada, the United Kingdom, France, and Germany. The company serves burritos, burrito bowls, tacos, quesadillas, and drinks. The company’s entire revenue comes from restaurant sales and delivery fees.
The five pillars of Chipotle Mexican Grill, Inc. (NYSE:CMG)’s business strategy are operating profitable restaurants; luring and keeping varied talent; establishing the brand as well-known, relevant, and adored; making significant investments in restaurant technology and innovation; and improving consumer accessibility and convenience. Morningstar analysts believe that the company has established a long-lasting niche in the US restaurant market by drawing customers away from both casual dining and traditional fast-food rivals with its affordable menu prices, exceptional convenience, and “food with integrity.”
In the first quarter of 2025, Chipotle Mexican Grill, Inc. (NYSE:CMG)’s sales surged 6.4% to $2.9 billion due to restaurant openings, making it the Best Food Stock. However, comparable store sales decreased 0.4% as a result of fewer transactions. The operating margin at the restaurant level dropped 130 basis points to 26.2%.
ClearBridge Growth Strategy stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q4 2024 investor letter:
“We also initiated a position in fast casual restaurant chain Chipotle Mexican Grill, Inc. (NYSE:CMG). The recent pullback in shares related to a moderation in industry-wide restaurant sales and CEO Brian Niccol’s August departure created an attractive entry point into a company with industry-leading unit economics in a still underpenetrated market. Chipotle plans to double its store footprint over time while executing initiatives to increase volume growth through technology enhancements, reduced mobile order friction and higher production during peak hours. Better throughput, technological integration and improved mix should help to drive continued margin expansion. Chipotle further diversifies the portfolio, adding to consumer discretionary where we have historically had less exposure.”
Overall, CMG ranks first among the 12 Best Fast Food Stocks to Buy Now. While we acknowledge the potential of fast food companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CMG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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